Zimbabwe:US punishes Barclays over Harare

Barclays processed 159 transactions totalling around $3,4 million from July 2008 to September 2013 to or through financial institutions in the US, including the company’s New York branch, for corporate customers of Barclays Bank of Zimbabwe

BARCLAYS Bank Plc has agreed to remit nearly $2,5 million to settle violations of the United States Zimbabwe Sanctions Regulations for processing transactions for corporate customers that are on the Department of the Treasury’s Office of Foreign Assets Control (OFAC) List of Specially Designated Nationals and Blocked Persons.

The US imposed punitive sanctions on Zimbabwe at the turn of the century embargoing businesses and individuals from trading with Zimbabwean government officials and entities.

According to a US Treasury statement, Barclays agreed to pay the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) in order to settle claims related to the violation of US sanctions by processing transactions for government-backed entities in Zimbabwe.

It is reported that the US Treasury noted the bank’s 159 transactions totalling around $3,4 million from July 2008 to September 2013 to or through financial institutions in the US, including the company’s New York branch, for corporate customers of Barclays Bank of Zimbabwe.

The transactions were mainly for the Industrial Development Corporation of Zimbabwe, which has in the past reported that it had over $3,5 million intercepted because of the US sanctions. The funds were for Chemplex Corporation and the Zimbabwe Fertilizer Company received from exports and for purchases

The US confirms the interception: “The bank (Barclays) failed to properly upload identifying information for the blocked person (IDCZ) into its sanctions screening filter in a timely or accurate manner and subsequently processed three additional transactions involving the same party between November 2012 and September 2013 — all of which were blocked by other US financial institutions.”

OFAC had initially set a total base penalty of $5 million for the breaches.

“This enforcement action highlights the importance for institutions with operations in countries with a significant presence of persons (individuals and entities) on the Specially Designated Nationals and Blocked Persons (SDN) list to take appropriate measures to ensure compliance with US economic sanctions laws when processing transactions on behalf of their customers to, through, or within the US,” read the statement.

The development confirms the negative impact that US and Western sanctions have had on Zimbabwe following their fallout with the southern African country.

Zimbabwe estimates that the total cost of the impact of sanctions is close to US$40 billion and has set the country back several decades in development.

Ironically, last week the US removed two banks, Agribank and Industrial Development Bank from its hit list with a spokeswoman at the US Embassy in Harare admitting that the previously sanctioned banks “provide services to undeserved, disadvantaged populations in Zimbabwe and serve unique development functions and important economic roles in agricultural and infrastructure finance.”

The US maintains sanctions on 98 individuals and 66 Zimbabwean entities and analysts have noted that these sanctions while crippling economic players also scare away investors who chicken out of the possibility of running afoul of US’ draconian regime against Zimbabwe.